Where does Cintas rank after its 27% announced dividend increase?

ctas

Cintas Corporation (CTAS) announced an annual dividend of $1.33, a 27 percent increase from the prior rate of $1.05 per share. The dividend will be paid at the new higher rate on December 2, 2016, to shareholders of record at close of business on November 4, 2016. Cintas Corp. is currently priced at $108.25.

Listed in the table below are the annual dividend payments since 2010. Our analysis of Cintas Corp. as a Top 100 Dividend Stock candidate is listed below;

Date Quarterly Dividend
11/4/2016 1.33
11/4/2015 1.05
11/5/2014 1.7
11/6/2013 0.77
11/7/2012 0.64
11/8/2011 0.54
11/9/2010 0.49
2/8/2010 0.48

Analysis of Cintas Corp. is based upon our five key criteria for the Top 100 list, which include; 

Category Value Score
Dividend Yield 0.96% 384
Dividend Growth (3-6 year avg) 16.9% 112
Forward P/E 22.31 242
S&P Financial Rating B++ 160
Beta 0.95 100
Total Score   998

Additional Information on P/S ratio and historical yield;

% Yield 3 Year Div. Growth Rate 6 Year Div. Growth Rate SPS 2016 P/S Ratio 10 yr P/S Low 10 yr P/S High 5 yr max Yield % 5 yr lowest Yield %
0.96% 19.1% 14.7% 47.07 2.30 0.73 3.06 3.36% 0.88%

Final Analysis;

  • Cintas’ dividend yield is below the average of the S&P 500 Index and is below its average historical dividend yield.
  • Cintas maintains a 3 year dividend growth rate of 19.1%.
  • Cintas has paid out a dividend consecutively for the past 33 years.
  • Cintas is trading at a high forward P/E ratio and at a high price/sales (P/S) ratio.  From a relative valuation perspective based upon P/S, Cintas is overvalued.
  • Cintas maintains a credit rating of B++. This is below investment grade, a negative.
  • Cintas maintains a beta of 0.95, lower than the average company.

Based upon its below average yield, high P/E ratio and poor financial rating, Cintas Corp. does not qualify as one of our Top 100 Dividend Stocks.

Cintas Corp. Dividend Yield Chart (Click to enlarge)

ctas2

Chart Explanation:  Dividend growth stocks may be viewed favorably when the current yield is above historical readings for the past 5 years.

Further information on dividend investing and evaluating dividend growth candidates can be found at http://seekingalpha.com/author/timothy-mcintosh/articles

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